A bill that would create a retirement plan for California private sector workers who have no pensions or 401-K’s is facing intense opposition from business groups. The bill was heard today by the Assembly Appropriations Committee.
The bill, authored by Democratic Senator Kevin de Leon would require employers to withhold about three-percent of the wages of private employees who choose to participate. The state would collect the money, invest it, and provide a modest return. De Leon says more than seven million Californians have no retirement savings and without the legislation they’ll be forced to rely on the state for assistance.
“We have before us the real potential to improve the human condition for many working Californians.”
But several business groups spoke against the measure. Mark Burgat with the California Chamber of Commerce says it opens up the state to more costs and liability.
“Someone will ultimately be on the hook for both fiduciary responsibilities and any shortfalls should this plan have shortfalls because the plan actually has guaranteed returns.”
Burgat says the bill moves the process of pension reform in the opposite direction.